U.S. Says It’s Concerned EU Won’t Drop Tariffs in Accord

(Corrects annual economic output in fifth paragraph of
story published March 12.)

March 12 (Bloomberg) -- The U.S. says the European Union
has backed away from a pledge to cut duties on American imports,
adding to tensions over tariffs as the world’s largest
commercial partners seek a trade deal.

Reducing $10.5 billion in tariffs between the U.S. and EU
was a key goal in a report last year on the proposed Trans-Atlantic Trade and Investment Partnership. The U.S. complained
after the EU’s top trade official last month said the U.S. offer
to remove tariffs wasn’t ambitious enough.

“The United States remains committed to the goal, written
into the High Level Working Group Report and endorsed by both
our leaders, of eliminating all duties on bilateral trade,”
Trevor Kincaid, a spokesman for the U.S. Trade Representative’s
office, said today in an e-mailed statement. “Recent actions by
the EU seem to back away from this goal and we need to know if
it stands by its commitment or not.”

The disagreement highlights challenges in reaching a trade
accord between the U.S. and 28-nation EU, which would expand the
world’s largest bilateral commercial relationship. The two sides
have sparred for decades on issues including agricultural
protections and food-safety standards. Negotiators this week are
meeting in Brussels to continue talks to create the world’s
largest free-trade area.

An accord would integrate the two economies, which produce
about $33 trillion in combined annual economic output, by
lifting tariffs and accepting each others’ standards on goods
including automobiles and chemicals.

Dow, Boeing

EU and U.S. trade officials originally set the end of this
year for completing the talks.

Kasper Zeuthen, an EU spokesman in Washington, declined to
comment on the U.S. complaint today.

Eliminating the estimated $6.4 billion in annual EU tariffs
on U.S. imports would benefit major exporters including Dow
Chemical Co., Boeing Co. and DuPont Co., according to a November
2012 Bloomberg Government study. U.S. chemical producers would
pay about $1 billion less a year, it said.

A report in 2013 outlining objectives for the talks
recommended eliminating all tariffs between the U.S. and EU,
noting such a step may be more difficult in areas that have
traditionally been protected, such as agriculture.

“In the course of negotiations, both sides should consider
options for the treatment of the most sensitive products,”
according to the report.

EU Trade Commissioner Karel De Gucht told reporters in
Washington last month that talks were entering a more difficult
phase as the parties sort out regulatory differences. He also
said the U.S. hadn’t matched the EU’s initial tariff-reduction
offer, which he described as ambitious.

“We have to demonstrate that we are in a position to have
an ambitious deal on tariffs -- on both sides, by the way,” De
Gucht said, according to a report from Bloomberg BNA.